Google and Media: iBreakfast Synopsis
April 23, 2009
Editor’s Note: I gave a short talk at the iBreakfast meeting on April 23, 2009. The organizer—Alan Brody—asked me to prepare a short write up for the audience. I did not have much time, so I pulled together some text from my new book, Google: The Digital Gutenberg plus some information I had in my files. Here is the rough draft of the write up I provided Mr. Brody. Keep in mind that I will be making changes to this text and may be changing some of the examples and wording. Constructive criticism is invited.
“Google is best known as a Web search vendor and an online advertising system. Google as a publisher is a new concept. How many of you know about the financial problems facing newspapers?
It may surprise you to know that Google offers a number of revenue generating opportunities to publishers. These can be as simple as the AdSense program. A publisher displays Google-provided advertisements on a publisher’s Web site. When a visitor clicks on an ad, the publisher receives a share of the revenue. A rough rule of thumb is that every 250,000 unique visitor clicks per months translates into about $200,000 in revenue. Over the course of a year, the Web site yields as much or more than $2.0 million in revenue to the Web site owner. Your mileage may vary, of course.
Another opportunity is for a partner to organize video content, take responsibility for selling the ads, and using the Google system to make the content findable. Google also handles the delivery of the content and the monetizing. The partner who uses Google as a back office can negotiate revenue splits with Google. This is a relatively new initiative at Google and disclosed in a Google patent document. (US2008/0275763 “Monetization of Digital Content Contributions”.)
But there’s more to Google than AdSense and ways for innovative content providers to make money. Much more.
I want to run through some public facing content services and provide a somewhat different observation platform for you to look at Google and the opportunities it offers those who see a potential pot of gold in Mountain View.
First, Web logs. There are more than 100 million of these “diary” or “blog” publications. Some are commercial grade; for example, TechMeme. Others are ephemera and rarely updated. Google publishes more than 70 Web logs about itself. Google owns Blogger.com. Google operates a blog search service. Google has made it possible to hook blogs into Google’s Web page service Google Sites, which is a commercial grade online publishing system.
Second, Knols. A Knol is a unit of knowledge. More practically, Knol is an encyclopedia. Articles are contributed by people with knowledge about a subject. The Knol publishing system borrows from the JotSpot engine purchased by Google from Joe Kraus, the founder of the old Excite.com service. Knols can hook into other Google services such as YouTube.com and Google’s applications.
Third, Google Books. Books is the focus of considerable controversy. What I want to point out is that if you navigate to the Books site and click on a magazine cover, Google has created a very useful reference service. You can browse the table of contents for a magazine and see the locations on a map when a story identifies a place.
Finally, directories. Google operates a robust directory service. It has a content intake system which makes it easy for a person to create a company listing, add rich media, and generate a coupon. If you are in the Yellow Pages business, the Google Local service seems to be encroaching. In today’s wireless world, Google Local could become the next Yellow Pages 21st century style. Here’s a representative input form. Clean, simple, easy. Are you listed?
The White House has gone Googley as well. Recovery.gov makes use of Google’s search and other technology to some degree. The White House uses Google Apps to accept questions and comments for the president. Google’s communications tools appear to be playing an important role in the Obama White House.
What’s been happening since the Google initial public offering in 2004 has been a systematic build out of functions. The core of Google is search and advertising. But the company has been adding industrial-strength functions at a rapid clip. The pace has put increasing pressure on the likes of Microsoft and Yahoo, not just in search but in mindshare.
The challenge Google represents to newspapers in particular and to traditional media in general is an old story. When Gutenberg “invented” printing (at least in the eyes of my Euro-centric history teachers), scribes were put out of work. New jobs were created but the dislocation for those skilled with hand copying was severe. Then the Industrial Revolution changed cottage industries because economies of scale relegate handwork to specialists who served the luxury market. Another dislocation. Google is a type of large scale disruptor. Google, however, is not the cause of the disruption. Google is the poster child of larger changes made possible by technology, infrastructure, and user demands.
Here’s a representation of how one created a newspaper from the early 17th century to roughly 1993, when the Web gained traction. Notice that there are nine steps. Time, cost, and inefficiency are evident. Now here’s a depiction of the Google Local or the Google Blogger.com service. Two steps. Disruption is inevitable, and it will be painful for those unable to adapt. For some, yesterday’s jobs and income levels are no longer possible. This is a serious problem, but Google did not cause it. Google, as I said in my 2005 monograph The Google Legacy, is a company skilled at applying technology in clever ways. Google doesn’t invent in the Eureka! myth. Google is more like Thomas Edison, an inspired tinkerer, a person who combines ideas until one clicks. That’s the reason for Google’s beta tests and stream of test products and services.
Google applies its technology to work around the inefficiency of humans. When I worked at Booz, Allen & Hamilton, then at 245 Park Avenue in the old American Brands Building, I spent my days, nights, and weekends preparing reports. Here’s a figure from Google patent document US: 2007/0198481.
Google continues to push products and services into different business sectors. These waves can be disruptive and often the cause of surprising reactions. A good example is the Associated Press’s view that Google is the cause of problems in daily newspapers. The AP overlooks Craigslist.org, questionable management practices, the rising cost of traditional printing and distribution. Google is successful; therefore, Google is the cause. Its technology is the root of the present financial evil at the New York Times, the San Francisco Chronicle, and the Detroit News.
What Google represents is a platform. For those who choose to ignore Google, the risk is similar to that of the people under this rock. If the rock moves, the people will have little time to move to safety.
Stephen Arnold, April 23, 2009
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